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Wednesday, 26 August 2015

Book Review: Postcapitalism
– A Guide to our Future

Paul Mason, Economics Editor for Britain’s Channel 4 News,
reminds us that capitalism is a temporary arrangement with a finite lifespan. Today,
he argues, it is possible to observe alternative practices that indicate a
post-capitalist future. Arguing that we are moving towards a prolonged period
of economic downswing as capitalism loses its ability to innovate, as nations
become trapped into spiralling debt management that foreclose public
expenditure , as people experience declining quality of life and increased
precariousness, and as ecological catastrophe edges closer, Mason wants us to imagine
alternatives and explore newly forming practices and networks that do not
cohere with capitalist logic and might instead be harbingers of a
postcapitalist future.

Mason’s core theoretical model comes from Nikolai
Kondratieff who argued that, rather than inevitably collapsing under crisis, capitalism
mutates and adapts. Capitalism’s crises, therefore, were not evidence of
disorder and imminent collapse, but structural change. Kondratieff argued that
these mutations took the form of successive waves. Each wave, Kondratieff
argued, has an upswing that lasts about twenty-five years and is fuelled by new
technologies and high capital investment, followed by a downswing of about the
same length, ending with depression. During upswings, recessions are rare and
capital flows to productive industries. During downswings, capital becomes
trapped in the finance system and recessions are frequent. Mason argues that
capitalism’s waves are currently disrupted because of neoliberal destruction of
trade union power; during downswings, capital’s instinctively represses wages however
organised labour movements resist this option and force capital to innovate new
modes of production and technology that usher the next upswing.

The prognosis of this extended downswing – in which profit persists
by depressing wages rather than innovating - are bleak. Mason’s example is his English
hometown of Leigh which, during his 1970s childhood, was thronged with
prosperous working-class families: “there was full employment, high wages and
high productivity. There were numerous street-corner banks. It was a world of
work, savings and great social solidarity” (p16). Mason witnessed the destruction of the social
fabric and the repression of wages all in the name of clearing the ground for a
free-market system. At first this resulted in “crime, unemployment, urban decay
and a massive deterioration in public health”, a decay acerbated by financialisation
– that is, banks increasingly dependent on leverage household debt so to
finance transactions in open trading markets (see Lapavistas, 2013) – so that
today’s urban landscape is one of expensive money and cheap labour, propped up
by charity “food banks”. Mason’s experience is hardly unique, Lisa McKenzie
describes the collapse of her English hometown: “The
one Co-op supermarket has gone and in its place are corner shops that sell no
food – only cheap alcohol, electric cards, and lottery tickets. There isn’t one
single pub left on the estate, and local people sit on the walls where they
once were with cans of cheap cider. This is perhaps one of the saddest things I
have seen” (McKenzie, 2015). Such scenes remind us that with declining
productivity and increasing concentration on open trade markets, capital can extract
higher value from finance than direct production and therefore, as Mason puts it,
“A single mum on benefits, forced into the world of payday loans and buying
household goods on credit, can be generating a much higher profit rate for
capital than an auto industry worker with a steady job” (p20).

Paul Mason

This reversal is one of several transformations into what
Mason terms the ‘zombie system’. If recent OECD financial projections are true,
then he interprets that by 2060 “Los Angeles and Detroit (will) look like
Manila today– abject slums alongside guarded skyscrapers; Stockholm and
Copenhagen (will) look like the destroyed cities of the American rust belt”;
overall a “stagnation in the West, a slowing pace of growth in emerging markets
and the likely bankruptacy of many states” (28-29). Meanwhile, Mason regards the
continuous increases in energy prices as signalling long term commitment to exploiting
raw materials, concluding that either there is an overestimation in the value
of oil and gas companies by about $4 trillion, or that nobody of influence
believes that we’re actually going to cut carbon use.

Where innovation occurs, Mason sees the technological
transformations as challenging capitalism’s ability to extract surplus value and
this threatens capital reproduction. Efficient markets are determined by the
outcome of rational marginal calls between the benefit of buying a scarce commodity,
versus the benefit of retaining the money. The key changing point, Mason
argues, is that scarcity no longer defines info-tech markets; today information can exist in potentially
unlimited quantities (thanks to the magic of ‘copy and paste’) and in
productive realms where this is the case, their marginal cost is zero. Meanwhile
marginal costs of some physical technology (memory storage, wireless bandwidth,
etc.) are collapsing towards zero and information content of lots of physical
goods is rising. Accordingly many commodity goods’ production costs can plummet
and this wrecks, Mason argues, capitalism’s price mechanism. And, as theory of
labour value promises, in circumstances where automation reduces the necessary
labour to amounts so small that work would become optional, the produced object
will probably end up being free, shared and commonly owned.

Mason argues that in info-tech markets it is conceivable to
have machinery which costs nothing, will last for ever and do not break down. Such
a machine would transfer a near-zero amount of labour value to the product,
thus reducing its market value. Mason’s example is the price of The Beatles’
Love Me Do on iTunes. Not only is the supply of the song infinite, but it costs
next to zero to store on Apple’s server and next to zero to transmit to
consumers. Yet the cost remains fixed at 99p, irrespective of fluctuations in
supply and demand. As Mason argues, the only way it is possible to run such an
information business is to rely on copyright law and generate “an entire walled
garden of expensive technologies that work together – the Mac, iTunes, the
iPod, the iCloud, the iPhone and the iPad -to make it easier for us to obey the
law than break it” (p119). Such monopolistic tendencies, he argues, is the only
way such industries can run and it completely depends on copyright law and restrictive
coding to prevent uncontrolled mass reproduction.

In contrast to monopolistic companies like Apple, Google and
Facebook, is open source programming whereby information is made freely
available. Popular examples like Firefox and Wikipedia demonstrate the
potential of this software to flourish, all based on non-market mechanisms like
decentralised cooperative voluntary work. And, inasmuch as Wikipedia makes no
profit, it probably makes it impossible for competitors to make a profit in the
same space. Social knowledge therefore can dissolve market mechanisms. We are thus
moving, Mason argues, towards a model in which the price mechanism for many
goods is corroded by pushing the cost of reproducing information goods towards
zero.

Of course capital hardly stands by. As Mason argues, it seeks
to remain profitable by either creating information monopolies, vigorously
defending intellectual property or scurrying to innovate ways of capturing and
exploiting produced information such as consumer data or capturing the value of
freely produced work (i.e. privatising other people’s voluntary coding). Further,
given that wages are repressed and that there is a consequent availability of
cheap, unorganised labour, anachronistic production models persist because it
is often more expedient to preserve a cheap workforce than to innovate by
automating production. Hence significant blockage exists to the flourishing of
‘postcapitalist’ networks.

Unsurprisingly for an economist, Mason’s analysis contains
no appreciation of marketing. Arguably an additional variable which acts as a
source of labour value is contained in customer based brand equity. For
example, whilst Couchsurfing presented an economy of voluntary labour to
establish a global network of hosts and guests, not only was this network
eventually incorporated in 2011, but crucially it also had its market share overtaken
by AirB&B. Arguably AirB&B’s attraction to consumers is that the brand
helps guarantee a certain level of service expectation and safety of payment
that is, arguably, difficult for voluntary movements to emulate. And, as
consumers actively produce what Arvidsson (2007) refers to as ‘ethical surplus’
that drives brand equity, brand value may be thought of as produced by social
necessary immaterial labour, thereby countervailing the decline of other
sources of labour value.

Further, as I and Detlev Zwick have argued (see Zwick &
Bradshaw, 2016), there is evidence to suggest that in the ‘wild’ of network
production, marketing looms like a predator to feed on free consumer labour.
That is to say, many social media consultants anticipate that the next phase of
marketing will exist in a widespread dissemination of marketing logic as it
becomes internalised by consumers (a process we call biopolitical marketing) who
relish shared productive activities in spaces that are actually private. If
marketing is to succeed in this (extremely difficult) task, then we will
witness an intensification of marketing rather than disintegration. Here
postcapitalism would distort into what O’Dwyer terms ‘virtual communism’; where,
though there may be commons-based peer production, the apparatuses that
leverage value extraction are never communally held (O’Dwyer, 2013:p498). As Stallabrass (2012) informs,
peer-to-peer systems had previously allowed users control of the frame as well
as the content. Consequentially, networked economies are typically a privatisation
of the commons, not the other way around (see also Kleiner and Wyrick, 2007). This
is not to reject Mason’s analysis as overly optimistic, but to agree with Gilbert
(2014) that the management of apparently horizontally constituted democratic
media is a key battleground of post-Fordist politics.

Specifically, the problem that Mason’s postcapitalism
encounters is whether there can be an unleashing of the networks and an
ushering of the next phase of innovation that would generate capitalism’s
unravelling. Not only must capitalists dispense with opportunities to privatise
new commons or strive towards monopolies, but they must also forego the temptations
of cheap, disorganised labour and instead invest in expensive machinery that will
ultimately destroy their source of surplus value. Whether or not such a phenomenon is likely,
Mason challenges us to be “unashamed utopians” (p288) and imagine what a postcapitalist
future may look like, rather than be stuck in the Jameson-esque trap where “it
is easier to imagine the end of the world, than to imagine the end of
capitalism”. As you read this, open source programming is being developed and
each time, it carries distinct potential to corrode specific price mechanisms
and destroy specific instances of free market logic of marginalism. Only an
absolute pessimist would believe that all these pieces of programming will be
appropriated, contained, ignored or repressed by capitalism. As Mason puts it,
“it is absurd that we are capable of witnessing a 40,000-year-old system of
gender oppression begin to dissolve before our eyes and yet still seeing the
abolition of a 200-year-old economic system as an unrealistic utopia” (p290).
Given the stark economic and ecological forecasts, perhaps we must all consider
how we can contribute to transforming these emerging processes into real
projects.

1 comment:

Alan Bradshaw has provided a wonderful lucid summary of Paul Mason's influential book released in the summer of 2015, and also shown us the potential related newer dimensions of post-capitalism that are being explored; including in the important work that scholars such as Alan Bradshaw, Detlev Zwick and Adam Arvidsson are doing.

I want to point out some disturbing aspects of the class of information technology innovations that attract fancy labels like "disruption" and "sharing economy". Uber and AirBnB are prime examples of these. The claim is that these innovations disrupt moribund and non-innovative markets (taxi fleets, hotel chains) via technology and bring about an efflorescence of pro-consumer innovations that really delight: affordable cars at our doorsteps via tapping an app; and convenient rooms and apartments anywhere in the world. The convenience aspects and affordability aspects, from the consumer perspective, largely ring true. But these are achieved by the use of underpaid and overworked contractual services of Uber drivers and AirBnB apartment and home owners. These folks, to eke out extra income in today's tough economic times, forgo the decent wages and benefits that organized taxi and limo drivers and hotel workers (including managers) enjoy. Instead, these so-called quasi-entrepreneurs (the Uber drivers, and apartment owners) turn into "chief, cook and bottle-washer; all rolled into one". These contractual workers, euphemistically dubbed as entrepreneurs, put in twice or thrice the efforts of similarly-tasked organized sector workers; at lower hourly pay rates, and with no health or other employment benefits. They also deploy their own assets (cars, apartments) for which they -- unlike the big asset-owning capitalists -- receive no or very low returns.

Of course, for Venture Capitalists and Financial Wizards of New York and London, these disruptive so-called "innovators" bring in the wafting sweet smell of mega-money. Uber is valued at over $50 billion, which is more than the valuation of the venerable Sony with 132000 well-paid and benefits-endowed employees. The new innovation formula is simple: make money for smart Finanzkapital whiz-operatives by providing attractive-to-consumer services while decimating the established well-paid employment base of the "staid old-guard companies".

If post-capitalism is merely the destruction of what has sometimes been dubbed the "labor aristocracy" via the use of overworked-underpaid contract workers, then we need to rethink harder about how to transcend the system that is steadily (and now rapidly) concentrating wealth in the hands of 1/100th of the top 1-percent.